Investing in Real Estate in Bulgaria: A Growing Trend Among Investors

27/09/2023 | Article | Immobilier en Bulgarie | Investissements

The real estate market in Bulgaria, and particularly in its capital, Sofia, is experiencing exceptional growth, with housing prices increasing by 50% to 70% since 2015.

Bulgaria is located in Southeast Europe, just a 2.5-hour flight from Paris. The country offers a wide variety of landscapes — mountains, plains, forests, lakes, and the entire Black Sea coastline. Bulgaria is also known for its abundance of thermal springs, ranking second in Europe after Iceland. With numerous spa hotels and wellness destinations, it is an attractive location for both living and investment.

With a population of around 7 million, Bulgaria has been a member of the European Union since 2007 and is expected to join the Schengen Area and adopt the euro in the coming years. The local currency is the Bulgarian lev (BGN), which is pegged to the euro. One euro is approximately equal to two levs, and this exchange rate is expected to remain stable until euro adoption. In practice, many real estate transactions are already conducted in euros.

Key factors attracting investors to Bulgarian real estate

Affordable price per square meter: Property prices remain significantly lower compared to other EU countries, despite a steady annual increase of 5% to 10%.

In Sofia, prices typically range between €1,500 and €2,500 per square meter.

In Varna, on the Black Sea coast, prices range between €800 and €1,500 per square meter.

Attractive tax regime: Bulgaria offers a competitive tax system, with a corporate tax rate of 10%, one of the lowest in the EU. Individuals also benefit from a flat income tax rate of 10%. Capital gains from real estate (also taxed at 10%) are exempt after three years of ownership.

The role of a real estate lawyer in Bulgaria

A lawyer specialized in real estate in Bulgaria plays a key role in the acquisition process. Their work includes a detailed review of all documents related to the transaction and ensuring compliance with all administrative requirements. Investing in property abroad always involves a certain level of risk. A lawyer helps mitigate these risks by conducting due diligence and verifying the legal status of the property.

How to buy property in Bulgaria

There are two main ways to acquire property in Bulgaria:

• Direct ownership (available to EU citizens)

• Through a company structure

Where are most investments concentrated?

• Sofia: The capital is the most popular option for rental investments, thanks to strong demand from students and expatriates.

• Varna: A coastal city ideal for seasonal rentals due to tourism and beaches.

• Plovdiv: The second-largest city, known for its cultural heritage and quality of life.

• Burgas: A major coastal hub with strong tourist demand and Bulgaria’s largest seaport.

• Bansko: A popular mountain resort offering ski tourism and year-round investment potential.

• Borovets: A well-known ski destination near Sofia with a growing real estate market.

NSP Avocats supports investors and expatriates throughout their real estate journey in Bulgaria. Our team provides thorough legal analysis and assistance to ensure a secure and transparent transaction. Do not hesitate to contact us to discuss your project.